EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.27% against the USD and closed at 1.2762, as investors remain cautious ahead of Germany’s constitutional court ruling tomorrow on whether a permanent bailout fund can go ahead.
Spanish Prime Minister, Mariano Rajoy, stated that he would not accept an economic rescue that dictates spending cuts or touches old-age pensions.
Meanwhile, the Troika of international auditors on Sunday rejected parts of Greece’s proposed austerity plan, forcing the country’s coalition government to seek fresh spending cuts to meet creditors’ demands.
Moreover, the Italian Prime Minister, Mario Monti, stated that nation’s economy would return to growth in 2013 amid decline in interest rates which is already taking place.
The Bank of France has forecasted a 0.1% economic contraction in the Q3 FY2012, unchanged from the previous estimate.
In economic news, the Euro-zone Sentix investor confidence index rose more-than-expected to -23.2 in September, from -30.3 in August. Separately, French industrial production rose 0.2% in July, against the expectations for a 0.5% fall. In Italy, gross domestic product declined 0.8% (QoQ) in the Q2 FY2012, against the flash estimate for a 0.7% fall in the Q2 FY2012.
In the Asian session, at GMT0300, the pair is trading at 1.2777, with the EUR trading 0.12% higher from yesterday’s close.
The pair is expected to find support at 1.2753, and a fall through could take it to the next support level of 1.2730. The pair is expected to find its first resistance at 1.2802, and a rise through could take it to the next resistance level of 1.2828.
Trading trends in the pair today are expected to be determined by the release of German wholesale price index and French nonfarm payrolls data. Moreover, investors remain cautious with Dutch elections and a German constitutional court ruling on the Euro-zone permanent bailout fund due tomorrow.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
